Market Opportunities for Prepaid: What Else is Hot Besides GPR?

As a US-based processor of prepaid and emerging payments, we are very tuned into the US prepaid market. Most of the news, commentary, and analysis we read about from our Silicon Valley office is all about general-purpose reloadable (GPR) prepaid cards. And that’s not surprising since it is the largest segment of the US open-loop prepaid market, according to Mercator Advisory Group’s Tenth Annual US Prepaid Cards Market Forecast, published last October. But in the rest of the world, it’s a different story.

Over the past several years, we have been taking our global platform to organizations around the world, and in the process have learned a thing or two about the prepaid sectors that are getting real traction. From the Middle East to Australia to Latin America and beyond, there are three opportunities in particular that are hot right now.

Prepaid Travel Cards

As the world becomes increasingly globalized and economies continue to recover, the demand for travel cards is up. There are more leisure travelers traveling and shopping abroad as well as corporate travelers that frequent specific destinations. Both need a safe and convenient way to carry and use their money. A wad of cash in their pockets has neither of those attributes! These consumers are also seeing the forex benefit that prepaid travel cards have. They can be loaded in the destination’s currency at times when the forex rate is most favorable and some – like the travel and GPR cards we launch on behalf of our clients – have multi-currency purses that allow the cardholder to carry different currencies all on one card. They can transfer money between purses & currencies in real-time and lock-in favorable rates, avoiding the hassle of exchanging cash in every country visited.

Some markets are particularly ripe for the adoption of prepaid travel cards, including Australia, India, and Brazil. Take Australia for example. Aussies love to explore the world and the number of Australians traveling abroad has increased considerably over the past few years. Many of their choice destinations are in Asia and oftentimes their journey takes them to multiple countries in one trip, making the convenience factor a big deal. These patterns illustrate how well-positioned prepaid travel cards are in this market, especially ones that have multi-currency capabilities.

Corporate Payroll & Payouts

Like travel cards, globalization & economic growth are also providing growth opportunities for corporate payroll cards. Companies are doing more business in more countries and they are employing people in those countries to execute their strategies. Whether they have a few people in a sales office or hundreds of workers in a factory, their problem is the same: global payroll is painful. Countries have different banking systems, compliance obligations, and regulations, and managing this complexity is no easy task. Prepaid payroll cards are a simple solution to these challenges. Moreover, the governments of some countries such as Saudi Arabia and the UAE, have passed laws mandating that worker’s pay will be delivered electronically. For those workers without a traditional bank account, the prepaid payroll card is the perfect solution. As more countries trend towards becoming cashless societies, we will see more and more demand for prepaid payroll solutions.

Government Disbursements

The Mercator report I referenced above had a government as the largest segment of the global prepaid market, accounting for 23.8% of the overall opportunity across the top 30 markets it studied. Europe, the Middle East & Africa (MEA), and Latin America were the regions with the biggest opportunities for government prepaid, which includes disbursements for things like social security benefits, welfare, and emergency or disaster assistance payments. Many governments are still reliant on paper-based methods for getting their payments out to citizens, so it is no surprise that we continue to see strong demand for prepaid in the government sector worldwide.